Forwarding drags down DHL Q1 results

Poor performance by Deutsche Post DHL’s Global Forwarding, Freight division tarnished an otherwise solid first-quarter result by Deutsche Post DHL, with the world’s largest postal, forwarding and logistics group announcing it will suspend its New Forwarding Environment (NFE) “transformation” programme which has been running for 15 months, in order to review the progress and determine how to proceed.


Forwarding drags down DHL Q1 results


Poor performance by Deutsche Post DHL’s Global Forwarding, Freight division tarnished an otherwise solid first-quarter result by Deutsche Post DHL, with the world’s largest postal, forwarding and logistics group announcing it will suspend its New Forwarding Environment (NFE) “transformation” programme which has been running for 15 months, in order to review the progress and determine how to proceed.

The group reported market-share losses in both its air and ocean freight businesses, with the company’s ocean freight volumes rising by just 2.3 per cent in the first three months, while air freight volumes remained flat, at approximately the prior-year level (+0.3 per cent). Describing its as a “stillchallenging market environment” for its Global Forwarding, Freight division, reported revenues increased by 7.6 per cent to €3.8 billion, although adjusted for currency effects, revenue increased by just 2.7 per cent. In contrast, the division’s operating profit experienced a sharp decline to €17 million in the first quarter, down almost two-thirds compared with the €49 million achieved in the first quarter of 2014.

DHL said air freight margins continued to be low compared with historical averages. “In light of the falling oil price, major customers engaged in aggressive competitive tendering in the second half of the prior year. Moreover, a number of new products were introduced to the consumer goods market. This caused transport capacity utilisation and rates to increase on the very busy routes from Asia.” Air freight revenue in the first quarter of 2015 grew by 11.9 per cent, while gross profit increased by just 0.5 per cent.